Justifying state interventions: the case of paternalism

Abstract

Justifications for state interventions which seek to influence the consumption patterns of goods, services and activities are usually based on notions of equity or efficiency: the market either fails to offer a fair outcome in distributional terms or it fails to arrive at an efficient outcome in terms of aggregate welfare. But these justifications, implicitly and unintentionally, often incorporate elements which focus on the correction of another kind of failure: that of individual reasoning. They do this either because the concepts of equity and efficiency are invoked to justify state intervention beyond the analytic competence of these principles, or because support for specific public policies or institutions require additional principles to justify the particular form these institutions take. In short, justifications from equity and efficiency are underdetermined. But in order to support interventions which are at least partly correcting individual reasoning failure, we need a defensible theory of state paternalism. Existing discussions of paternalism fail to explain why the state should know better than the individual what is in his or her own best interests, even if it is acknowledged that individual reasoning can be sub-optimal. The thesis concludes with a discussion of criteria which do support the superior decision-making of the state in certain circumstances: where the benefits (or costs) of consumption are likely to occur a long period into the future; where direct experience of the particular form of consumption is problematic; and where technical complexities make judgement about appropriate consumption difficult. The thesis concludes with an analysis of some applications and implications of these proposals for state intervention in consumption.